UKRAINE’S President proudly boasted of a ‘permanent ceasefire’ with Russia, but Vladimir Putin is having none of it.

Network Writers, wires

News Corp Australia NetworkSeptember 4, 20146:50am

RUSSIAN President Vladimir Putin hasn’t agreed to reported ceasefire with Ukraine “because Russia is not party to conflict”, his spokesman says.

A statement issued earlier from Putin’s Ukrainian counterpart Petro Poroshenko stated that Russia and Ukraine had agreed to a “permanent ceasefire” in fighting engulfing the east of the ex-Soviet state.

But a spokesman for Mr Putin has denied that an agreement has been reached.

In a brief statement issued earlier, the Ukrainian president’s office said Putin and Poroshenko held a telephone exchange “that resulted in an agreement for a permanent ceasefire in Donbass (eastern Ukraine)”..

The brief statement gave no details and there was no immediate reaction from the Russia-backed separatists whom Ukrainian forces have been fighting since April.

I get the feeling that this is all just a game to Putin and Peskov. Putin says one thing, and then Peskov backtracks. #UkraineCeasefire

In agreement for “permanent ceasefire” ... Russian President Vladimir Putin and Ukrainian President Petro Poroshenko, with Belarussian President Alexander Lukashenko (centre). Picture: APSource:AP

Russian markets jumped on the news. The MICEX benchmark was 3 per cent higher while the rouble rose 1.2 per cent against the U.S. dollar.

Putin’s spokesman said earlier that the Russian President and Poroshenko had found in a recent discussion that they “largely share views” on ways out of the crisis.

Ukraine and the West have accused Russia of sending its troops and weapons to support pro-Russian insurgents who have been fighting government troops in eastern Ukraine since mid-April. Moscow has vehemently denied this charge.

Over the weekend, the European Union leaders agreed to prepare a new round of sanctions that could be enacted in a week, after NATO accused Russia of sending tanks and troops into south-eastern Ukraine. A NATO summit in Wales on Thursday is also expected to approve measures designed to counter Russia’s aggressive actions in Ukraine.

In telephone hook-up with Russian President ... Ukraine President Petro Poroshenko. Picture: APSource:AP

US President Barack Obama arrived in Estonia Wednesday morning in a show of solidarity with NATO allies who fear they could be the next target of Russia’s aggression.

Fighting in eastern Ukraine has killed nearly 2,600 people and forced over 340,000 to flee their homes, according to the UN.

Putin held talks with his Mongolian counterpart on Wednesday during a five-hour working visit to a traditional friendly neighbour.

Putin and Elbegdorj Tsakhia met in the capital, Ulan Bator, for discussions on increasing trade and upgrading transit links. They were to oversee the signing of 13 agreements across a range of fields before Putin’s late afternoon departure.

Moscow firmly controlled Mongolia during the Cold War and retains considerable influence over this vast landlocked nation sandwiched between Russia and China. Mongolia relies on Russia for almost all of its gasoline and diesel fuel and much of its electricity.

Moscow also holds a 51 per cent stake in Mongolia’s railway and a 49 per cent stake in its largest state-owned copper mine.

With Western investment declining, the Alaska-size country of 3 million people is turning increasingly to China and Russia to support its mining and animal herding-based economy, while also maintaining close ties with the US and others as a counterbalance.

Chinese President Xi Jinping paid a state visit last month, during which the sides pledged to almost double their annual two-way trade to $10 billion by 2020.

In contrast, trade with Russia fell by 16 per cent to $1.6 billion in 2013 versus the year before, and dropped by another 13 per cent in the first six months of this year, according to Russian figures. That was attributed to reduced demand for oil products, machinery and equipment as a consequence of the ailing Mongolian economy.

Coming so soon after Xi’s visit, Putin’s stop in the country is a further indication of the increased significance Mongolia’s neighbours are playing in its economic development, said Neil Ashdown, an expert on Mongolia at London-based information and analysis firm IHS.

Despite Mongolia’s transition to Western-style democracy, the two countries remain close, something seen in the positive views of ordinary Mongolians, particularly the older generation, Ashdown said. Attitudes toward China tend to be somewhat less trusting, reflecting fears of being swallowed up by their giant neighbour.

“Russian’s relationship with Mongolia is in some ways more straightforward than China’s. Russia and Mongolia get along quite well,” Ashdown said.

Putin’s visit is his third since he first became Russia’s president in 2000. It comes as Ukrainian officials say their country’s armed forces are now locked in a conflict with not only Moscow-backed separatists, but also the Russian army, although Putin has denied that his forces are invading Ukraine.

In response, President Barack Obama and Western allies are due to approve plans this week to position at least 4,000 troops and military equipment in Eastern Europe to reassure nervous NATO states near the Russian border.

Even before the crisis over Ukraine, Putin had been seeking to upgrade Russia’s relations with countries to the east, including Japan and South Korea, Ashdown said. As a stable, low-risk neighbour, Mongolia plays an important role in the strategy, particularly as a southward transit route for Russian exports, he said.